Modi govt to announce DBT of Rs 4,000 per acre for farmers, to provide interest-free crop loans at a cost of Rs 2.3 lakh crore

The Central government is expected to make an announcement this week regarding the benefits targeting farmers. This comes close on the heels of the BJP government’s poor performance in three state elections.

In a possible relief to the farmers across the country, the Centre is likely to announce direct benefit transfers (DBT) worth Rs 4,000 crore per acre per season. Additionally, each farmer will get interest-free crop loans at a rate of Rs 50,000 per hectare up to Rs 1 lakh, Business Todayreports.

The entire exercise designed to relieve farmer distress will cost the Centre nearly Rs 2.3 lakh crore on an annual basis. The DBT will alone cost Rs 2 lakh crore whereas another Rs 28,000 crore – Rs 30,000 crore will be used for subsidies.

At present, the crop loan offered to farmers is at a subsidised rate of four percent. But, under this initiative, the bank won’t charge any interest up to Rs 1 lakh of loan, reports India Today.

To make sure that all the beneficiaries are covered through this scheme, the government has called for meetings at the PMO.

Officials from agricultural, revenues, expenditure, food, chemical and fertilizers departments will meet to iron out any glitches from the initiatives.

At present, DBT for fertilizers costs the Centre Rs 70,000 crore annually. This will be subsumed in the new scheme.

Business Today quotes a government official on the upcoming announcement:

DBT works differently at present, with a limited but pivotal role of the manufacturers. With this, we will be successful in plugging the pilferage and will also reach the actual beneficiary.

The government’s key goal with this initiative is to bring every beneficiary under the scheme.

To this end, the Centre will be working with the states to offer the benefits. The initiative will be implemented with the State government on board, paying 30 percent, while the rest (70 percent) will be borne by the Centre. So far, many states have expressed their wish that the Centre takes up the entire burden.